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If you have a debt that has remained unpaid for a period of time, it is likely that the debt will be assigned (turned over) to a debt collection agency for collection. If that happens, the law provides you with important protections. Please note that many of these rules apply only to a debt collector hired by a creditor. If a creditor is collecting a debt owed directly to it, many of these rules do not apply.


Under the federal law called the Fair Debt Collection Practices Act, a debtor has a right to obtain "verification" of the debt and to dispute any portion of the debt. Verification includes providing a copy of any judgment that may have been obtained against the consumer. A judgment is a determination by a court, in a lawsuit, that you owe a sum of money to someone else. If the debt has not been reduced to a court judgment, verification will include providing to the debtor the name and address of the original creditor if different from the present creditor.


In any communication with a debtor, collectors must identify themselves by their name and may not use an alias or false name. They must also accurately identify the agency that they represent.

Also, there are a number of practices which are specifically prohibited by the Wisconsin Consumer Act (Chapters 421 to 427 of the Wisconsin Statutes). For example, the original creditor or his or her debt collector may not: 1) use or threaten force or violence to a debtor, his or her dependents, or property; 2) threaten criminal prosecution; 3) contact your employer and tell your employer that you have such debt; 4) communicate with you with such frequency or at such unusual hours as can reasonably be expected to threaten or harass you; 5) claim, attempt, or threaten to enforce a right with knowledge or reason to know that the right does not exist. Federal law provides that a debt collector shall assume that a convenient time for communicating with a consumer is after 8:00 a.m. and before 9:00 p.m.

The use of obscene, profane, or threatening language is prohibited. Similarly, the use of any false representation or deceptive means to collect or attempt to collect any debt or obtain information concerning a consumer is prohibited. Please note, a creditor who advises a consumer or debtor that if certain payments are not made within a particular time, the debt may be forwarded to an attorney for legal processing may not be violating the law but may only be indicating the legal processes which are available to it. If a creditor or collection agency indicates that a particular debtor may be taken to court, though, and that step is not taken, this may violate the false or misleading representation provision mentioned above.


If you are being contacted by a creditor or a debt collector, you should keep a record of all contacts you have with the company. This will help you remember what has been said between the parties. In addition, your record may assist you if you are harassed or otherwise treated unlawfully by a creditor or debt collector, and you later decide to sue them for their behavior.

Keep a record of all telephone contacts, including: /p>

·     the full name of the person you speak with,

·     the company for which he or she works,

·     the creditor’s name,

·     the date, time, and place you received or made the call,

·     and a summary of the conversation.

If you are contacted through mail or email, keep all the letters and envelopes that you receive.

If you feel upset or have particular worries because of the contacts, you should also write down an explanation of those feelings and how they affected you.


You do not have to accept continued telephone calls or written communications from a debt collection agency. Federal law provides that if you notify the debt collector that you wish them to cease further communication with respect to the debt (except to advise you that further collection efforts are being terminated or that specific remedies, including a lawsuit, may follow), the contacts must stop.

It may be in a debtor's best interest to negotiate with a creditor or collection agency to either reduce the total amount of the debt owed, particularly if certain portions of it are contested, and/or to work out an installment payment agreement. If the creditor is willing to do this, the agreement should be put in writing, signed by both parties, and the consumer should keep a copy. It is generally a good practice to communicate with creditors in writing and always keep copies. If payments are made in accordance with the installment payback agreement, there should be no further collection efforts by the creditor, and the agreement would be enforceable by either party if the matter ends up in court. If the debtor or consumer violates such an agreement, it can be expected that the creditor will continue collection efforts, which may include referral to a lawyer and a lawsuit and perhaps eventual garnishment of wages or bank accounts.

Some creditors are willing to work with debtors as long as the creditor believes the debtor is being truthful and acting in good faith. Sometimes, particularly if the debtor is only temporarily unable to pay (the regular installment or anything at all), it is good practice for the debtor to call the creditor, explain the temporary setback, and offer to report his or her income and/or expenses. If the matter is very serious, the debtor may offer to make such reports monthly (in writing if necessary) until the situation improves.

Some consumers believe that as long as some payment is being made on a bill, a creditor or collection agency may not undertake collection efforts or sue the consumer. Generally, this is not true. Unless there is an agreement by the creditor to accept installment payments as mentioned above, and the installment payments are current and not in default, a creditor may bring legal action at any time permitted by law for the total amount owed.


If one of the provisions of the Wisconsin Consumer Act has been violated, the injured debtor may recover actual damages, which may include damages caused by emotional distress or mental anguish. If there was a finance charge in connection with the transaction, alternative damages of twice the amount of that finance charge, up to $1,000, may be awarded. If a customer establishes that he or she was induced to surrender collateral (goods subject to a security interest in favor of a merchant, which secures a customer's obligations under the Consumer Act) by conduct of the merchant or merchant's agent which violates the Debt Collection chapter of the Wisconsin Consumer Act, the customer shall be entitled to a determination of the right to retain possession of that collateral, and if the customer prevails on that issue, to also recover actual damages for loss of use of the collateral while it was out of the customer's possession.

Should a debt collector fail to comply with the provisions of federal law, that collector is liable for any actual damages sustained by a debtor, together with reasonable attorney's fees. If you have been subject to illegal behavior by a debt collection agency, you should contact a private consumer attorney who may be able to obtain his or her fee from the creditor or collection agency. Look at the ads in the yellow pages under "Consumer Law Attorneys." Look for ads indicating no charge for initial consultation. Also, you can obtain the name of a consumer attorney from the State Bar Lawyer Referral and Information Service at (608) 257-4666 (in Dane County) or (800) 362-9082 (statewide).

If you are low-income, and you have a claim concerning a violation of the Wisconsin Consumer Act or the Fair Debt Collection Practices Act, Legal Action of Wisconsin, Inc. may be able to assist you. However, because your attorney fees may be payable by the creditor if ordered by a court, you should consult a private consumer attorney first before seeking legal representation at Legal Action.

The above is intended to provide general information only and is not a substitute for thorough and specific advice on an individual case. Depending on the complexity of your legal problem, you may need to consult an attorney for advice or representation.

This was prepared by the staff of Legal Action of Wisconsin, Inc. on behalf of low-income clients and was funded by the Legal Services Corporation, Washington, D.C., 20005. Any opinions contained herein are those of the authors and should not be construed as those of the Legal Services Corporation.

Legal Action of Wisconsin, Inc. does not discriminate on the basis of disability in the provision of services or in employment. If you need printed material interpreted or in a different form, or if you need assistance in using our services, please inform us. Deaf, hearing-impaired, or speech-impaired callers may reach us through the Wisconsin Telecommunication Relay System (711 or 1-800-947-3529).

©August 2006 Legal Action of Wisconsin, Inc.

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